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    Published on: May 12, 2010

    Notes & comments from the Content Guy

    LAS VEGAS - The comments may not have qualified as wildly radical, but there were some comments made at various sessions at the Food Marketing Institute (FMI) Show here that certainly served as gentle nudges into a future in which the supermarket may have a different relationship with the shopper.

    Some examples:

    • During a panel discussion following the annual FMI Speaks presentation, John Rand, director of retail insights for Kantar Retail Americas, said that retailers need to find a way to provide the same kind of information on the shelf that is provided via the internet; customers need to be able to reach out and touch a price marker and get all sorts of additional data. “Give me the next page,” Rand said, suggesting that to not provide such info is to ignore the needs of an entire generation.

    During the same discussion, Wendy Liebmann, founder/CEO/chief shopper with WSL Strategic Retail, said that retailers need to cater to “customers who do not know how to cook, but do know how to text.”

    • Liebmann also cautioned retailers that are engaged in SKU rationalization, eliminating mid-level national brands in favor of private labels. She suggested that there is a “shopper in the middle” who will rebel when a favored national brand is eliminated, who does not want to or is not prepared to buy an equivalent private label, and that retailers have to be careful not to lose those shoppers.

    • Both Rand and Liebmann made the point that they feel that supermarkets have not done a good enough job of teaching customers, who have cut back on dining out, about how to cook. “I don’t think we’ve taken advantage of this window,” Rand said. “It is amazing how little new cooking information is available in most grocery stores.

    • Leslie Sarasin, president/CEO of FMI, said during the Speaks presentation that the trade association is revitalizing its brand logo and using a new tagline to reflect shifting priorities: Feeding Families and Enriching Lives.”

    • During a workshop focusing on the work of the Healthy Weight Commitment Foundation, David Mackay, president/CEO of Kellogg Co., said that if the food industry is to be effective in helping fight the childhood obesity issue, there needs be be “a level playing field,” and everybody needs to get on board. If only 70 percent of companies work to improve the nutritional content of their products, it will prompt government intervention...which happens to be pretty much what the White House said when it issued a new report on Tuesday. (See our second story today on MNB.)

    One other note from FMI...

    The Network of Executive Women (NEW) yesterday gave its Outstanding Champion Award to Delhaize America, honoring the company for its culture of “embracing differences, learning and development.”

    In accepting the award, Ron Hodge, CEO of Delhaize America, said he was proud to have grown up “in a company that gave me the opportunity not to know the difference” between what men and women could bring to the company. “We just think we are doing the right thing for our business.”
    KC's View:
    Don’t forget...if you are going to be at the FMI show today in Las Vegas, Michael Sansolo will be at the MyWebGrocer booth (#2243) from 2-3 pm, talking about the implications and possibilities of mobile marketing. He’d love to see you.

    Published on: May 12, 2010

    The Wall Street Journal reports that the Obama administration has released a 120-page report “calling on food makers to curb marketing of unhealthy foods to children” as “part of a broad assault against childhood obesity.” The report also “contends that companies' previous efforts to regulate marketing of sugary and fatty foods on their own have shown minimal results. During the past five years, food makers including Kraft Foods Inc., General Mills Inc. and others have stopped advertising certain unhealthy products to children through a handful of venues including television, radio and print advertising.

    “The report says food companies should extend their current self-imposed regulations to cover all forms of marketing to children, and food retailers should avoid in-store marketing that promotes unhealthy products to children. It says all media and entertainment companies should limit the licensing of their popular characters to food and beverage products that are healthy.

    “If these efforts don't work, the report says, the Federal Communications Commission should consider stronger regulations by ‘revisiting and modernizing rules on commercial time during children's programming’.”

    In addition, the Journal writes, the report says that the “Food and Drug Administration and U.S. Department of Agriculture should collaborate with the food and beverage industry to develop and implement a standard system of nutrition labeling for the front of packages.” It also calls on restaurants to reducing portion sizes and making healthier choices available to children.

    The Grocery Manufacturers Association (GMA) immediately released a statement responding to the report:

    “America’s food and beverage companies are committed to a genuine partnership with First Lady Michelle Obama in her efforts to reverse the trend of childhood obesity within a generation.  We agree that everyone has a role to play, including industry.  We embrace our responsibility.
     
    “We have improved the nutritional profile of more than 10,000 of our products to reduce sugar, fats, calories and sodium. We promise to continually improve.  In the near future, many of our member companies, through their work with the Health Weight Commitment Foundation, will be announcing additional and measurable goals to reduce childhood obesity by providing even more healthy choices.
     
    “And we’re not just making our foods healthier.  More nutritional education is an essential key to healthy living.  We’ve made a commitment to share more information about foods than ever before.  We want consumers to feel confident in the choices they make to help their families build and maintain healthy lifestyles.
     
    “Government also has an important role to play, and GMA supports legislative efforts to strengthen the Child Nutrition Act, including new strong, science-based nutritional standards for foods sold in schools.  And just last week, we stood with Rep. Ron Kind to applaud his Healthy CHOICES Act which would adopt a multi-pronged approach to tackling obesity.
     
    “Ending childhood obesity within a generation is a goal every American should embrace, and America’s food and beverage industry is proud to do its part.”
    KC's View:
    There is no question that childhood obesity is a problem that needs to be attacked, but I can tell you just from the emails I receive that there are a lot of people with no appetite for government telling companies what to sell and how to sell it, who prefer for the market to make these determinations.

    I don’t agree with them. I feel strongly that companies need to do the right thing on their own. But if there are foods and products out there that are harmful to children in both the short-term and long-term, and if it is perceived that companies are exploiting children in some way, I’m not sure it is outside the mission of government to step in and protect them. I’d like to think that parents would do it on their own...but the number of obese parents out there suggests that not all adults know best on this issue. The human costs - and the health care costs - are just too great to ignore.

    Published on: May 12, 2010

    Crain’s Chicago Business reports that drug store chain Walgreen has agreed to sell at-home personal DNA testing kits that are manufactured by a San Diego startup, Pathway Genomics. According to the story, “For up to $30, the kits will reveal to consumers a variety of health-related genetic information, including their risk for diseases and the potential for passing them on to their children.

    “In the kits, customers will find a vial to collect saliva and a postage-paid envelope. The sample can be sent to Pathway's laboratory. Consumers can access the results online — for an additional cost of up to $179.”

    “We recognize that for some, genetic (testing) is becoming an important component of managing one’s health care,” a said a spokesman for Deerfield-based Walgreen. “There are people who need and want to know about their genetic history and makeup, and this is a vehicle and product that will enable them to do so.”

    The Los Angeles Times reports that “the Food and Drug Administration said it was investigating the medical claims that Pathway is making in marketing its genetic test to consumers. The test has not been approved by U.S. regulators.”
    KC's View:
    Crain’s gets one thing wrong - this is not the first such at-home DNA testing kit to reach the market. There was a similar product called CellF that was sold a few years ago, and that cost $99.

    I’m sure there may be some regulatory issues here, but essentially this is a very good idea that eventually will find traction. I was impressed with how Lunds and Byerly’s marketed the CellF version - not only could you get a report, but you could bring it into one of the company’s stores and have the food experts there help you pick out a menu of foods that are appropriate to whatever genetic predispositions you have.

    This is the future. We may not quite be there yet, but it is undeniably where we are going.

    Published on: May 12, 2010

    Bloomberg reports that Walmart has agreed to settle a class action lawsuit that charged it with not paying vacation and other back wages to employees who had left the company, as required by state law.

    However, Walmart did not admit to any wrongdoing in the settlement.

    The cost of the settlement of a case in which the retailer said it did nothing wrong: $86 million.

    Bloomberg reports that about 232,000 employees will share in the settlement money, which comes out to about $370 apiece...before the lawyers get paid.
    KC's View:
    The irony, of course, is that most of those workers will be able to make money go the farthest by shopping at ... Walmart.

    Published on: May 12, 2010

    Published reports say that Kroger-owned Ralphs has been charged with 14 counts of false and misleading advertising, false labeling and “unlawful computation of value.”

    According to reports, the charges by Los Angeles prosecutors resulted from undercover inspections at more than a dozen stores in Southern California. Ralphs spokesperson Meghan Glynn said the company would be launching its own probe into the charges.

    If the company is found guilty, it could result in fines and penalties of more than a quarter-million dollars. The Associated Press reports that the company was hit with similar charges in 2008 and 2009, and paid close to $17,000 in fines.
    KC's View:

    Published on: May 12, 2010

    Yesterday, MNB took note of an Austin Business Journal report that HE Butt’s opening of a new limited assortment/discount format - Joe V’s Smart Shop - has drawn the attention of Trader Joe’s which has sent HEB “a letter telling it to immediately cease and desist its use of the word ‘Joe’ and threatened to ‘pursue any and all available legal remedies’ if those demands were not met ... While Trader Joe’s alleges the new name will cause confusion among the consuming public, HEB is asking a federal judge to give it a green light to use the new name, according to records.”

    Well, we got an email yesterday from an HEB executive who also happens to be an MNB reader, and he wanted to add another wrinkle to the story: that the format’s general manager’s name is Joe Villareal.
    KC's View:
    Which just further cements my point - this is a silly move on Trader Joe’s part.

    Published on: May 12, 2010

    Agence France-Presse reports that France-based Carrefour plans to open “its first wholesale store in India, without a local partner” before the end of the year. The store, classified as a “cash and carry” store that caters to the other businesses, will be 60,000 square feet and be located in New Delhi.

    The company says that it hopes that the store opening will lead to a relaxation of local rules that prevent non-Indian companies from opening retail outlets; Carrefour has said that it would like to open hypermarkets in India.
    KC's View:

    Published on: May 12, 2010

    As expected and widely predicted, Walmart yesterday named Andy Clarke, Asda’s COO, to be the new president/CEO of the British retailer. He succeeds Andy Bond, who moves into the part-time role of executive chairman.
    KC's View:
    Y’think he only got the job because Andy Warhol, Andy Roddick, Andy Griffith, Andy Richter and Andy Kaufman were not available?

    I’m just askin’...

    Published on: May 12, 2010

    ...will return. We promise.
    KC's View: